You make an important point. I too believe that its important to understand the small entrepreneur in our traditional societies and make them inclusive in this growth we are witnessing today.

I like your idea of shareholding of landowners and i already see the motivation as you mention – its not just the cost motivation but the urge to be on your own. I guess its only a matter of time before this starts happening.

I agree with the broad thoughts in your article. But, I dont agree on one issue you have raised – rural economy, land acquisition, etc. Why would an entreprenuer (farmer, landowner) lose his enterprise to become a worker/slave (security job or peon job in a company) – doesnt make sense for him. Especially, when he has seen that when he has sold his land for x today, the same land is worth 2x or 5x in anywhere between 3 to 5 years’ time. No, the entrepreneur is smarter now. What is the answer to this.

An alternative: Make the entrepreneur an entrepreneur again by making him part of the growth story. Form a corporation of landowners in a particular rural area and make them stakeholders in the proposed enterprise so that they get part of the upside of land price increase and continue with other sops like one job per family, etc. Corporations have to be diligent, honest, and a bit more socialist to do this. Otherwise, land acquisition will not work in today’s high real estate price scenarios. After all, the only investment that Indians make when they have lots of money and the only investment option that an average Indian understands the economics of reasonably well is the real estate investment.

On another issue, I dont understand why Government have to SELL land to industries at rock bottom prices. Why dont they LEASE land on a long-term basis (say 50 years). That way industries are promoted (lease costs may not be high). PLus the public/government gets back the land at the end of some period (presumably when it has reasonably developed). This will also end the craze of some corporations to amass low cost land and utilize so little).

And well, the successful people you mention are those who shifted base to the US, Europe and in some cases Africa. Yes there are a few exceptions in the case of the Birlas, Tatas and Ambanis but they are too few for a country our size. British bureaucracy, the ancient Roman system of licenses, etc. influenced our business for a long time.

Also till recently almost every child in an Indian household was expected to study hard and get a good job. The focus has never been on wealth/job creation but job security. It was this mindset I was referring to.

And btw, while you paint a harsh picture of a mill worker out on the streets, I don’t expect the solutions to be heartless. I expect there will be a safety net – compensation, retraining etc. – I didn’t go into that because it wasn’t the thrust of the post.

Interesting take on our loss of entrepreneurial DNA because of generations of foreign rule. How do you explain our successful entrepreneurial communities – gujaratis, marwaris etc.

Industrialization has often been mistaken for economic development. Give credit to the policies and methods of the industrialized western nations where its due, but broad-brushed assumption of success of those models in India, or anywhere else is a bit far fetched. The picture would certainly not look so rosy here if one considers constituent demographics, urban congestion, infrastructural hurdles, power situation, poor agricultural yield (not necessarily because of reasons of soil health or fertility). US model may work, but it has to be comprehensive, not just as in liberal hire and fire – for starters, how about Social Security as in the US ?

In any populous country, alternatives for rehab initiatives should also form part of recommendations for productivity enhancement – and any attempts to convert farmlands into industrial zones, would only result in protests of the kind witnessed in Nandigrams (WB) and elsewhere.

If I, for example, were a mill worker with a family to feed, I wouldn’t be able to fill their stomachs with dreams of a better India. I would have been brought up in a different India and since that India (pre ‘91) is so much different from this I will have adjustment issues with ideas like capitalism. I am thus a victim of society and since it’s not my fault why should I absorb the aftershocks?

Put plainly we are lucky to have been brought up in a very different environment, which has made us more competitive and adaptable to change. But till the older generation phases itself out there is not much economics can do.

On a tangential thought, the US is made up of a bunch of risk-taking entrepreneurial people who left Europe for better pastures. We on the other hand are a fairly conservative crowd and have been run over by almost every power: the Greeks, the Aryans, the Afghans, the Persians, the British and in some places by the Dutch, Portugese and the French! Thats a huge difference in mindset and its deeply seeped in our DNA. We have come a long way since then, no doubt. But it will take some time till we are truly globalised.

In the second point I meant “Burning need for transparency” not “burning transparency”.